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RBA Minutes leave the market relatively unchanged.

Written by Sam Coxhead on August 16th, 2011.      0 comments

12:00 PM (AEST) In overnight trade the big mover was the NZD/AUD pair as investors looked to buy AUD against selling the NZD ahead of the Reserve Bank of Australia (RBA) monetary policy committee meeting minutes. So far the support at .7900-.7920 (1.2625- 1.2660 resistance) has held, should that give way the next major support is at .7810 (1.2800), albeit unlikely we will see these levels. The interest rate market in Australia has been pushing for cuts in the cash rate from the RBA to the point where 120 odd points of easing were priced into the interest rate curve ahead of the announcement.
This move towards easing comes after last week’s bounce in the unemployment rate from 4.9% to 5.1% and the soft economic data of late, and the increased turmoil seen in markets last week.
The minutes were measured in their tone, acknowledging the increased inflationary pressure, but also slowing domestic demand the fragile global economy. The full text of the minutes can be see here: RBA Minutes . Take into account these minutes are from the meeting which was held on the 4th August, before last week price action.
The AUD has moved slightly higher on crosses since the release, and the interest rate market has reacted by maintaining its easing bias in the months to come.
In offshore markets overnight, there was a continuation of yesterday’s rally back in risk assets, albeit somewhat measured. The market seems to content to have a smoother ride this week, while the meeting between German and French officials will be closely watched for any substantial headlines.
          Past 24 hours
  Current level Pre-RBA Minutes  % Chge RBA Minutes   Low High
NZD/USD 0.8312 0.8300 0.14%   0.8265 0.8390
AUD/USD 1.0486 1.0481 0.05%   1.0413 1.0513
NZD/AUD 0.7927 0.7917 0.13%   0.7896 0.8050
AUD/NZD 1.2615 1.2631 -0.13%   1.2422 1.2665
NZD/GBP 0.5078 0.5073 0.10%   0.5045 0.5152
NZD/EUR 0.5759 0.5749 0.17%   0.5721 0.5864
NZD/YEN 63.91 63.80 0.17%   63.76 64.51
NZD/CAD 0.8160 0.8152 0.10%   0.8134 0.8290